What is RERA? How will it impact the home buyers?

Indian Real Estate market has gone through a lot of transformation over a period of time in terms of markets, products, and many regulations. The most revolutionary legalization in real estate sector is the introduction of RERA (Real Estate Regulation & Development Act) 2016 which intends to bring some amazing reforms and transparency and accountability in the sector. RERA not only mandates compulsory registration for Real Estate projects/Agents/Intermediaries and host of disclosures are required to submit by the promoters of the projects. If any such promoters failed in registering there is significant penalties for noncompliance but the buyers and allottees are bestowed with abundant of rights protected. The act is basically to fast track the mechanism and addresses the grievances.

Quickly let’s see in short the Objective of RERA:  

• Promotion of effective and transparent Real Estate Transactions and for Consumers Protection.
• Establishment of Regulator for regulation in Real Estate Sector
• Speedy adjudication mechanism by establishing regulator and creating Real Estate Appellate Tribunal. 

How RERA will impact Home Buyers 

1. Transparency – the act warrants showing complete transparency from the developers of all the projects. The builder has to show or disclose all the details pertaining to the property like the plan, approvals, layouts, FSI and all other things related to the project.
2. Liability- one of them major benefits that buyers will enjoy is the liability.
3. RERA insists that all the property developers must give now rates in terms of carpet area. There will be no space for the built up area or super built up anymore and the buyer will have clear status as to what they are getting in name of space of which they paying.
4. RERA also tackles the most crucial part and that is Real Estate Agents. Today we can find in every nook and corner a real estate agent working in a very informal way, they do not have any official number or id no and no such registration hence there are no implications of any barriers. RERA proposes each and every single broker to get register which will make easy for buyers to track their records verify them and add a level of security.
5. Builders can’t delay your projects. Scores reveal that there has been a trend for not delivering you’re the projects, but now no developer can do this under the law they need to pay an interest rate of 2% points above the banks to the home buyers.
6. Builders cannot charge extra.
7. Builders are responsible for any defect in the new construction
8. Security to buyers – an escrow account needs to be open where the developer will transfer 70% of the funds received for that particular project. He cannot rotate that money anywhere else and the money can be withdrawn as per the stages of the construction.
9. Also, RERA has changed the definition from 1000 sq mt to 500 sq mt or a total of 8 flats of the bare minimum for regulatory coverage.

All in one RERA stipulates the state level regulation related to real estate, disputes formed and settled in a speedy fashion. This will give a sense of security to buyers too and will create a good impact.